CD PROJEKT Group Q3 2021 Financial Results: Transcript of Audio Webcast

Key insights

6 takeaways

01
CD PROJEKT Group reported 144 million PLN in sales revenue for Q3 2021, marking a 38% year-over-year increase driven by digital sales of Cyberpunk 2077.See it on page 2
02
The company maintains a strong financial position with 1.185 billion PLN in cash and liquid assets to fund long-term AAA development.See it on page 3
03
Next-generation updates for Cyberpunk 2077 are scheduled for release in the first quarter of 2022, with similar updates planned for The Witcher 3.See it on page 10
04
Management is restructuring GOG to focus on its core DRM-free business and is integrating GWENT operations into CD PROJEKT RED to improve operational efficiency.See it on page 5
05
The company is currently prioritizing internal development capacity over external acquisitions and has decided against including Cyberpunk 2077 in subscription-based services at this time.See it on page 10
06
Sales for The Witcher 3 declined in Q3 2021 due to a lack of new content and a normalization of market demand following the 2020 pandemic peak.See it on page 5

Summary

CD PROJEKT Group demonstrated financial resilience in the third quarter of 2021, reporting 144 million PLN in sales revenue, which represents a 38% year-over-year increase. This growth was primarily fueled by digital sales of Cyberpunk 2077, even as the company continued to incur significant servicing costs to stabilize the title. With 1.185 billion PLN in cash and liquid assets, the organization maintains a robust financial foundation intended to support long-term AAA development and future organic growth.

The company is currently undergoing a strategic transition, shifting development resources toward next-generation updates and simultaneous production across its two primary franchises. While sales for The Witcher 3 experienced a decline due to the absence of new content and a normalization of market demand following the pandemic-driven peaks of 2020, management remains focused on quality control. This includes restructuring GOG to emphasize its core DRM-free business and integrating GWENT operations directly into CD PROJEKT RED to optimize team efficiency.

Looking ahead, the organization is prioritizing the release of next-generation updates for both Cyberpunk 2077 and The Witcher 3, with the former scheduled for the first quarter of 2022. While the company remains open to strategic acquisitions to bolster talent, it is currently prioritizing internal development capacity. Furthermore, management has adopted a cautious approach to distribution, noting that it is premature to include Cyberpunk 2077 in subscription-based services. This strategy reflects a broader commitment to stabilizing existing intellectual property before expanding into new multiplayer features or external platforms.